BY SAM ALFAN.
Safaricom chief executive officer Peter Ndegwa and senior telco officials have suffered a loss after their attempt to suspend a warrant for their arrest over the failure to pay a litigant more than Sh7 million was dismissed by the High Court.
Embu High Court Judge Lucy Njuguna dismissed the application saying the matter, which is pending before a lower court, is yet to be determined.
The judge said the fate of that application is yet to be determined and the court cannot assume that the giant telco will automatically be granted the leave sought.
“As such, it would be presumptuous for this court to grant stay of execution orders before the applicant (Safaricom PLC) is granted leave to appeal. In any event, and as the court has observed herein above, the applicant has not challenged the ruling delivered on the 8th of December 2022 by the trial court,” ruled Judge Njuguna.
Other than Ndegwa, those to be arrested include directors Dilip Pal, Christopher Kirugia, Winifred Ouko, Raisibe Morathi, Sitholizwe Mdalalose, Rose Ogega, Francesco Bianco and former CEO Michael Joseph.
According to the warrant of arrest dated 9th December 2022, Officer Commanding officer (OCS) Parklands Police station should arrest CEO Ndegwa alongside other safaricom PLc officials and produce them before Embu law Courts for sentencing.
“This is to command you to arrest the said CONTEMNORS and upon arrest , the directors be arraigned before this court for sentencing as soon as will be reasonable practicable and in any event NOT later than 10th January 2023,” stated warranted of arrest issued by Embu Senior Principal Magistrate.
The OCS was further directed to return the warrant as soon as it is executed.
“You are further commanded to return this warrant as soon as it is executed with an endorsement certifying the day on which and manner in which it has been executed, or the reason it has not been executed,” states the warrant issued on 9th of December 2022.
Ephantus Mbogo Njuki wants the officials punished, accusing them of refusing to comply with a court order, directing them to pay him the money.
The judge observed that the Garnishee Order Absolute had been overtaken by the ruling delivered on December 8, 2022 and as such, the court was persuaded by the submissions by Njuki that it does not have jurisdiction to entertain the application.
Safaricom through lawyer Edna Rweya had pleaded with the court to rescue the CEO and top directors claiming if orders sought are not issued they will suffer substantial loss and prejudice.
“Unless this application is heard expeditiously and the orders sought herein are granted in favour of the applicant/appellant (Safaricom PLC), will suffer great loss and prejudice,” the application read.
Safaricom argued that if the warrant of arrest is not suspended, the intended appeal will be rendered an academic exercise and nugatory.
The company has argued that it will be ordered to assume the liability of the Invesco Insurance Company and pay monies which they are not holding on behalf of the insurer.
Safaricom further says the Garnishee proceedings were undefended and punishing its bosses without hearing their side will cause them irreparable economic loss.
The giant telecommunications company said given an opportunity, it will prove that there were no sufficient funds to satisfy the order.
Further, the monies payable was to be sourced from the subject Mpesa Paybill Account and not via execution of warrants of Arrest against the Directors of the applicant.
It urged the court to allow the application as it has sought leave to appeal the ruling of the trial court following the issuance of warrants of arrest.
Njuki through his lawyer Morris Mugendi opposed Safaricom PLC application arguing that the court does not have the jurisdiction to entertain the application for stay.
The lawyer argued that contempt of court proceedings are sui generis in nature and Safaricom ought to have appealed against the ruling by the trial court and not to bring the said application.
“The wording of the provision contemplates that an appeal must be in existence before an application for stay can be entertained,” said the judge.
The Judge noted that there was no appeal before the court or even a draft memorandum of appeal challenging the decision of the trial court, which found the directors of Safaricom guilty of contempt of court.
Senior Principal Magistrate H. Nyakweba ruled last year that the corporate veil should be lifted so that the directors can be punished for declining to comply with his directive.
The court had said the directors of Safaricom should be arrested and presented before court for sentencing soonest but not later than January 10.
“In the upshot, I allow application dated 3rd November, 2022 as prayed. As a result , I issue a warrant arrest against all directors of Safaricom PLC. Upon arrest, the directors should be arraigned before me for sentencing as soon as will be reasonably practical and in the event not later than 10th January, 2023,” Magistrate Nyakweba.
Safaricom operated an Invesco Assurance account through Paybill 980100 as per the court order.